When soot and other pollution blows away from power plants, the emissions can cause problems for nearby states that are trying to clean up their air. Today, the Environmental Protection Agency (EPA) proposed[2] a regulation that would make it easier for downwind states to met air-quality standards.

"This EPA proposal is a big step in the right direction," said Frank O'Donnell of Clean Air Watch in a statement, who called for deeper reductions. "There is no question we will need further pollution cuts from power plants to meet updated national clean air standards for smog and soot."

The so-called transport rule would impact 31 eastern states and the District of Columbia. By 2014, the rule would reduce sulfur dioxide and nitrogen oxides—which contribute to smog—by 71% and 52% compared with 2005 levels. The agency estimates that these reductions would result in up to 36,000 fewer premature deaths and $120 billion of health benefits annually, such as preventing acute bronchitis and asthma attacks. The annual cost of compliance, such as upgrading power plants, would be $2.8 billion.

The transport rule replaces a 2005 Bush Administration proposal, called the Clean Air Interstate Rule (CAIR).

In 2008, the U.S. Court of Appeals for the D.C. Circuit told EPA to revise CAIR, by specifying which states were contributing pollution to other states, for example. Concerned that CAIR would allow power plants to buy pollution credits from other states, the court also wanted EPA to ensure that each state would end up with cleaner air.

In a press conference call today, Gina McCarthy, EPA's assistant administrator for air and radiation, said that agency scientists had done computer modeling of how pollution moves between states. In its proposed new rule, the agency allocates a pollution "budget" to each state and would allow trading of pollution credits between power plants within states. Limited trading would be allowed between states, with penalties if the state exceeds its pollution budget.

Some observers are wary. "I'm very cautious about any interstate trading in this rule," says Paul Miller, deputy director of the nonprofit group Northeast States for Coordinated Air Use Management in Boston. He would like to see a solid scientific explanation that trading would improve air quality in downwind states.